💡What’s a Security Token and why do many analysts predict that eventually the majority of financial products will be traded on the blockchain as security tokens?
Not all ICOs are created equal. Almost every token right now is a UTILITY coin. They are not technically considered a security by regulators because they are products that give you access to types of software, products or services.
Security Tokens represent a much smaller share of the market. However, analysts predict this will change throughout 2018.
“So what are Security Tokens?”
In short, they are financial products. They are actually financial securities, like shares or equity in traditional assets, startups, venture funds and real estate. These are tokenized funds, tokenized real estate and tokenized commodities. These tokens represent ownership in a real asset.
“Okay, I think I get it. Can you put it into a sentence that’s not crypto-y?”
Yes! A utility token is kind of like buying tokens to play games at Dave and Busters. You buy the tokens, which give you access to their products. You could even resell your tokens to a friend, etc.
A security token is kind of like buying Dave and Buster’s (PLAY) stock on Wallstreet. One is for utility and access the other is a financial product.
In the United States, these token sales and investments are subject to SEC securities regulation. Which is good.
NEW MONEY content is to help educate and get women excited about blockchain and crypto. However, we are not financial experts. All content for informational and entertainment purposes.